The capacity of the Nicaraguan prison system was greatly expanded during the Sandinista period to keep pace with the incarceration of political prisoners. By the mid-1980s, the country had nine penitentiaries or public jails, holding cells in forty-eight local police stations, and some twenty-three DGSE detention centers. By the government's own estimate, there were 5,000 prisoners in 1984, of whom 2,000 were National Guardsmen or others accused of cooperation with the Contras. An independent human rights group in Nicaragua, the Permanent Human Rights Commission, claimed in 1986 that 10,000 were incarcerated, 70 percent of whom were political dissidents. The International Committee of the Red Cross, which periodically visited prisons, counted more than 1,000 guardsmen and 1,500 others accused of pro-Contra activity in early 1988. An estimated 500 to 600 additional persons were in DGSE facilities. After the release of thirty-nine inmates in February 1990, no further political prisoners were believed to be in Nicaraguan jails.

Under the Sandinistas, mistreatment and torture were reported to be common in the DGSE detention centers. The regular penitentiaries and public jails were known for primitive conditions and corruption emanating from the Prison Directorate under the Ministry of Interior. The largest penitentiary at Tipitapa outside Managua held most of the National Guardsmen and persons linked to the Contras. Tensions between inmates and guards were high, especially during peace talks, when releases appeared to be near. Heightened tensions were caused primarily by political prisoners who were unwilling to do work that they believed could help the Sandinista cause.

In late 1990, President Chamorro created a National Penitentiary Commission to oversee and improve the penal system. A report issued by a human rights group in 1992 described conditions in the national penitentiary system as "disastrous." The report accused the government of inexcusable indifference because it failed to allocate adequate funds. The prisoners were described as suffering from lack of food, clothing, medicine, and medical treatment. Cases of malnutrition were found as well as contaminated water. Although physical abuse in the penitentiaries was rare, a high percentage of prisoners complained of torture and mistreatment in police detention cells.

As a result of drastic cutbacks in the judicial system's budget, more than half of the prisoners in 1993 were persons awaiting trial.

Data as of December 1993